His outgoing administration has been running the country since the election but has been able only to deal with day-to-day affairs rather than to take more strategic decisions.
Thousands of Belgian trade union members marched on Saturday in protest against the failure of politicians to form a government and grapple with rising fuel and food prices.
The linguistically divided country, home to the headquarters of the European Union and Nato has been without a government for a record period, sparking speculation the 177-year-old state could split into Dutch- and French-speaking regions.
An opinion poll published on Monday showed a vast majority of Belgians wanted the country to stay together.
Verhofstadt spent a week assembling an alliance of Christian Democrats and Liberals - each split into Dutch- and French-speaking camps - and Francophone Socialists.
In the June elections, the Liberals and Christian Democrats won 81 of the 150 seats. But their efforts to form a government collapsed repeatedly in disputes over more regional autonomy.
"There has been a tough electoral campaign, there have been efforts to form a government, but now we are turning the page," Yves Leterme, head of the Christian Democrats in Flanders, said.
"We are making a collective effort to work as a team," said Leterme, who could eventually become prime minister if a permanent coalition government is formed after his party came out on top in the polls six months ago.
Economic and social issues
The emergency government is set to deal with economic and social issues left unattended for more than six months and will serve to draft constitutional reforms to grant more self-rule to Flanders, Belgium's Dutch-speaking northern half, and Wallonia, the Francophone south.
In wealthier Flanders, a region of 6.5 million, more self-rule is supported by all parties. But politicians in poorer Wallonia, with its 4 million residents, accuse Dutch-speakers of seeking to wrest social security from the hands of the federal government.
That, they say, would mean the end of Belgium.
The interim government is to be in office until the end of March when it is to make room for a government Liberals and Christian Democrats, the winners of the June vote.
By then, it is hoped Dutch- and French-speaking politicians will have healed their divisions over more regional autonomy.